Indonesia: IBRA's Asset Management Unit/ Asset Management of Credits

Sharon Nunn ()
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Sharon Nunn: YPFS, Yale School of Management, https://elischolar.library.yale.edu/journal-of-financial-crises/

Journal of Financial Crises, 2021, vol. 3, issue 2, 381-409

Abstract: In 1998, Indonesia's banking sector was undercapitalized, under regulated, and suffering from an excess of nonperforming loans (NPLs). In response, the Indonesian government devised the Indonesian Bank Restructuring Agency (IBRA) and its Asset Management Unit/Asset Management of Credits (AMU/AMC) as part of a three-pronged government emergency plan, along with a blanket guarantee of the debts of all domestic banks and a framework for corporate restructuring. The AMU/AMC acquired and managed nonperforming loans from a variety of Indonesian banks and attempted to dispose of them. The AMU/AMC had acquired nearly IDR 400 trillion (approximately $86 billion) in face value of loans by April 2003. Throughout its history, the organization encountered political interference, transfer issues, documentation problems, and problems with legal authority that impeded its effective operation. Although the AMU/AMC was wound down on its initially scheduled end date of February 27, 2004, its functions and many unresolved legal cases were simply shifted to a new asset management company under the Ministry of Finance.

Keywords: Asian Financial Crisis; asset management; Indonesia; IBRA; nonperforming loans; loan restructuring (search for similar items in EconPapers)
JEL-codes: G01 G28 (search for similar items in EconPapers)
Date: 2021
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